Morning news and update

The uptrend continued in the index for the fourth straight session on Wednesday amidst a range bound movement. The 50-share index closed near the open of the day and right at the 61.8 per cent retracement level of the downfall. The entire price action resulted in the Nifty forming a doji pattern carrying higher high-low. As discussed in the last column, we mentioned bull has the momentum, but don’t expect a run-away rally as market breadth is a big concern. Once again market breadth was tad on the negative side on Wednesday. Also, we had mentioned the importance of 61.8 per cent retracement level on the upside and Nifty failed to surpass this level convincingly.

On the daily chart there is one interesting observation on the index, the index has formed a two-bar narrow range (2-bar NR). Markets are in a constant state of flux, they are continuously shifting from sluggishness to rapid movement time and again. Formation of the 2-bar NR, a price pattern that is the narrowest two-day range relative to any two-day range within the previous 20 market days, reflects the market concept of contraction as coined by Toby Crabel. As per Toby Crabel’s since this pattern is such a well-defined contraction pattern, trending would take place over the next several days. Hence, spotting of this rare pattern on the index would light up the eyes of trend traders as they would be expecting a trending move after a period of rest or a contraction.

Talking about the crucial levels to watch out in the coming session. On the upside, the level of 11,480 would be crucial in Thursday’s session to watch out. If it sustains above the 11,480 mark it would pave the way towards our estimated target of 11,550-11,600 in the short term. While, on the downside, any close below the prior will lead to levels of 11,200 followed by 11,090. To traders we advise to wait till these levels are breached for clear trading opportunity i.e. a breakout above 11,480 along with improvement in the market breadth and on the downside, watch out for 11,400 mark.

Bajaj Finance:Board meeting scheduled to be held on 22nd October 2019 to consider revision in the limits approved for ECBs by way of loan and/or issuance of secured/unsecured notes, bonds, debenture, etc.

Edelweiss Financial Services: Kora Master Fund LP has received the approval of the Competition Commission of India for its proposed investments in Edelweiss Securities Limited, a wholly owned subsidiary of the Company.

Zuari Agro Chemicals: Company has informed that the NPK Plant have been shut down due to non-availability of raw material.

Deepak Fertilisers: A meeting of the Committee is scheduled to be held on 19th October, 2019 to inter-alia consider the allotment of First Tranche of FCCBs aggregating to US$ 15 Million to International Finance Corporation (IFC).